Don't cut salaries, cut costs

Human resources experts feel this is the right time for companies to gain staff loyalty; they feel employees must not be seen as a liability, but as an asset. For, once the global recession is over it will be hard to hire good people.

OFFER your employees a month's leave without pay or half salary for a good 15-day study leave. These, according to human resources expert Asha Naik, are some ways companies can tackle the ongoing financial crisis.

Naik, the global head of human resources at Tata Technologies also warned, "Small and medium size companies cannot afford to treat their employees shabbily." She feels that it's time for companies to put loyalty policies in place.

"The recession is not going to last for more than 18 months. If you remove your staff or ill-treat them now, you may find a major human resource crunch when you need them after the recession," Naik added.

Naik's views were echoed by Dean of Management Faculty, Pune University, C M Chitale. He stressed that salaries need not be slashed, instead, companies should cut costs. "Current human resource must be consolidated and must not be seen as a liability, but as an asset," Chitale said. He emphasised on improving quality and need-based training.

Although co-founder of More Than HR Global and head of Cerebrus, Rajesh Kamat advised against mass retrenchment, he, however, said heads may roll.

"This is a good time for companies to look at non-performers and send them a signal that they need to perform," he said. Kamat added that mass retrenchment could lower the morale of the employees.

Naik saw this phase as an opportunity to gain loyalty of the employees. "If an employee knows she/he is taken care of even during the recession, she/he is less likely to leave the company when it needs her/him the most," Naik said.